Major banks may be slowly backing away from financing some fossil fuel infrastructure, but they fund a wide range of projects that contribute to climate change and biodiversity loss. While banks claim to be embracing sustainability this does not square with many of the projects they finance.
According to the Bankrolling Extinction report produced by portfolio.earth banks are funding crimes against nature. In 2019 alone the world’s largest investment banks provided $2.6 trillion worth of ecosystem destroying financing that has been linked to biodiversity loss and mass extinctions. Fifty top investment banks are named in the report including big American banks.
While there have been some positive steps towards preventing biodiversity loss, banks are funding what can only be described as a war against nature and this threatens half of all species on earth. According to the Portfolio.earth report banks make little or no effort to assess the impacts on biodiversity in their processing of loan applications.
According to the UN’s Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), the funding of things like food, fossil fuels, forestry, mining, infrastructure, tourism, transport, and logistics are driving biodiversity loss. The report concludes that three-quarters of the earth’s land surface and two-thirds of the ocean surface has been altered by human activity.
We know that climate change has caused mass extinction events in the past so reducing global warming causing emissions is an essential part of efforts to preserve biodiversity. As reported by the Guardian, banks have a pivotal role to play to curtail the interrelated issues of global warming and biodiversity loss. This is the view of the lead author of the IPBES report, Prof Kai Chan of the Institute of Resources, Environment, and Sustainability at the University of British Columbia.
“A global sustainable economy sits at the centre of humanity’s much-needed transformation to meet the climate and ecological crises. And at the centre of that sit the banks and the finance institutions whose investments power development around the globe.” Prof Kai Chan said.
The value of biodiversity may be even greater than previously thought. A recent study showed that the biodiversity costs of climate change are five times larger than prevailing predictions. In the light of such research, there is growing pressure on banks to become part of the solution.
Professor Chan envisions a future in which capital support for projects is contingent on the ability to demonstrate environmental betterment. “Imagine a world in which projects can only raise capital when they have demonstrated that they will contribute meaningfully and positively to restoring the planet’s bounty and a safe climate for all,” Chan said.
There are the 3 events that will take place this year that will go a long way in addressing the issues that drive biodiversity loss. What happens at the high-level Ocean Conference in Lisbon, the Biodiversity Summit in Kunming, and the COP 26 climate summit in Glasgow may well determine the fate of the natural world.
We know what we have to do to preserve biodiversity and the newly elected Biden administration gives us reason to hope. They are earnestly working to address climate change both domestically and around the world. However, banks must conduct biodiversity impact assessments on every project they finance if we are to succeed in preserving what remains of the natural world.